The Organization of Petroleum Exporting Countries (OPEC) said today that the world’s major oil producers have reached an agreement to increase production, agreeing to a sustained and gradual ramp-up from August that will add 2 million barrels per day by the end of the year.
The United Arab Emirates had blocked passage of the production increase in early July, but the 23 oil producers in the Organization of Petroleum Exporting Countries and Russia and other oil-producing nations (OPEC+) have now reached an agreement.
OPEC stated that it will increase production by 400,000 barrels per day per month from August to December this year, adding 2 million barrels per day to oil market supply by the end of the year.
OPEC+ cut oil production when the outbreak caused a collapse in demand for crude more than a year ago; however, it has slowly increased production since May this year.
With the economic recovery driving up oil prices, OPEC proposed an agreement to increase production, but previously strongly opposed by the United Arab Emirates, resulting in a stalemate. The United Arab Emirates only supports a short-term increase in production. And demanded better conditions if the agreement is to be extended to next year.
OPEC+ finally agreed to extend the implementation date of the overall program from the previously planned termination in April 2022 to the end of 2022, leaving more room to operate in case the global economy is again dragged down by the new variant of the virus.